Economic Highlights - Leading Index Slowed Down In June, Pointing To A More Moderate Economic Growth In 2H 2010 - 19/08/2010

◆ The Leading Index, which provides an early signal of the direction that the economy is heading, fell by 0.1% mom in June, the same rate of decline as in May and compared with -2.6% in April. This was the sixth straight month of decline in seven months, pointing to a weakness in the leading index. Declines in unit labour cost in the
manufacturing sector (-0.2%) and the number of housing permits approved (-0.2%) were mitigated by a pick-up in the Bursa Malaysia Industrial index (+0.4%) and CPI for services (+0.2%; inverted) as well as a turnaround in trade with eight major trading partners (+0.3%) and the number of new companies registered (-0.6%). A smaller
drop in industrial material price index during the month also helped. As a result, the leading index’s six-month smoothed growth rate eased to 2.0% in June, from +3.1% in May and a high of +11.2% in March (see Chart 1). This was the third consecutive month of easing and the slowest pace of increase in 15 months, suggesting that
the economy is heading towards a more moderate growth in 2H 2010, after recording a robust growth of +9.5% yoy in the 1H.

Economic Highlights - Leading Index Slowed Down In June, Pointing To A More Moderate Economic Growth In 2H ...